Tax Credit for First-Time Buyers

By Suze Orman
Tax credit for first-time buyers

The new economic stimulus package changes the rules for tax credit for first-time home buyers.

In 2008, Congress enacted a new law that gave first-time home buyers a maximum tax credit up to $7,500 on the purchase of a primary residence. Individuals with income below $75,0000 and married couples with income below $150,000 were eligible. The one catch is that the credit was actually a no-interest loan from the IRS that had to be repaid over a 15-year period.

In the new bill, the credit is raised to a maximum of $8,000 or 10 percent of the purchase price—whichever is lower—but the good news is that you no longer have to treat the credit as a loan. There is no repayment requirement. (But if you bought your first home in 2008 and claim the credit, it will still be treated as a no-interest loan that must be repaid.)

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From The Oprah Winfrey Show Recession Rescue with Suze Orman


 

Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc. and its affiliated companies and entities is not responsible for any losses, damages or claims that may result from your financial or legal decisions.